Binance and its legal team filed a motion to have the SEC stopped from stating that CZ and the exchange had commingled users’ funds.
The ongoing litigation between Binance Holdings Limited and the United Securities and Exchange Commission (SEC) is slated to have a huge impact on the cryptocurrency industry in the region. Crypto firms that operated in a similar manner as the Binance ecosystem – including staking as a service, crypto custodial services, and token listing for trading – clearly understand whatever the court rules for the exchange will apply to them. As a result, every ruling is heavily anticipated for the sake of other crypto firms.
Binance Losses Motion to SEC
In the June 5 legal charges by the SEC, Binance was accused of several misconducts including operating unregistered exchanges and also mishandling users’ funds. According to Gurbir S. Grewal, Director of the SEC’s Division of Enforcement at SEC, Binance’s operations are highly opaque thus lacking the necessary transparency to regulators and users. Particularly, the SEC alleged that Binance and its CEO commingled users’ funds, which put American investors at risk.
In its defense, Binance filed a motion on June 21 seeking to have the SEC stopped from ‘misleading’ the public on asset handling. Notably, Binance and its legal team noted that the SEC had no evidence that CZ and the exchange had commingled users’ funds.
“The SEC has no evidence that BAM [Binance.US] customer assets have been dissipated, commingled or misused in any way,” Binance told the courts.
However, senior United States district judge Amy Sauber Berman Jackson of the United States District Court for the District of Columbia has denied the motion to have the SEC stopped from referring to certain statements. According to the judge, there is no material evidence that the SEC’s public statements will affect the proceedings in the particular case.
“While all of the lawyers, in this case, should adhere to their ethical obligations at all times, it is not apparent that Court intervention to reiterate that point is needed at this time, or that it is necessary or appropriate for the Court to get involved in wordsmithing the parties’ press releases. Nor is it clear that the agency’s public relations efforts to date will materially affect proceedings in this case,” the judge noted.
The cryptocurrency market has so far reacted differently from the SEC charges against Binance and other exchanges including Coinbase Global Inc (NASDAQ: COIN). Undeniably, Binance’s native coin BNB was negatively affected by the litigations that claimed the coin is an unregistered securities asset. According to our latest crypto market data, BNB traded around $238 on Tuesday, down approximately 23 percent in the past month.
The narrative is different on Bitcoin (BTC) which had gained approximately 12 percent during the same period.